House leaders consider increasing Mass. sales tax from 5 to 6 percent

BOSTON - Leaders of the state House of Representatives met behind closed doors on Friday, partly to discuss possibly raising the state's sales tax to 6 percent.

After emerging from the two-hour meeting of about 50 House members, Rep. Charles A. Murphy, the budget leader of the House, said that increasing the sales tax to 7 percent is "way too high" and that a boost in the income tax is "a non-starter."

Murphy, a Burlington Democrat, said he expects a vigorous debate on taxes when the House meets on Monday to begin deliberations on the state budget for the fiscal year starting on July 1.

"If the will of the House is such that a majority of members want a tax increase, there will be a tax increase," he said.

Murphy chairs the House Ways and Means Committee.

Rep. Benjamin Swan, D-Springfield, who attended the meeting, said members discussed raising the sales tax from 5 to 6 percent. Swan, who is vice chairman of the Committee on Post Audit and Oversight, believes a majority of members would vote in favor of that proposal.

"I think that would fly," he said.

If the sales tax is increased from 5 to 6 percent, it would raise about $750 million a year. It would also be a 20-percent boost in the sales tax, which is currently 5 cents per $1.

The Massachusetts Bay Transportation Authority in Boston receives about $750 million from the sales tax each year, or about 20 percent of the proceeds from the tax.

Swan said the new money could be used to restore budget cuts from state aid to cities and towns, and from health and human services. Other money from a tax increase would go to replenish the state's $1.3 billion rainy-day fund, he said.

A House Ways and Means budget, unveiled on April 15, includes $1.8 billion in cuts to state programs to help close $3.6 billion shortfall in the fiscal 2010 budget. The full House will debate and approve a budget next week.

Jay R. Kaufman, D-Lexington, co-chairman of the Committee on Revenue, will lead an effort over the weekend to come up with a specific tax package to present to members on Monday, said Swan.

If the House approved a tax bill on Monday, the bill would move to the Senate.

House members submitted about 70 proposals to increase taxes, including charging a sales tax on gasoline, extending the sales tax to certain services, and raising the state income tax from 5.3 to 6.3 percent.

House Speaker Robert A. DeLeo, D-Winthrop, shunned reporters on Friday, escaping through an exit that allowed him to avoid questions. Journalists were camped outside the meeting, which was conducted in an inner meeting room of the House.

Seth Gitell, the spokesman for DeLeo, said members expressed interest in a number of revenue tools, including the sales tax.

Gitell said that DeLeo "will continue to work with his leadership team to forge a consensus that works for Massachusetts during a very difficult climate."

Gov. Deval L. Patrick told reporters he is skeptical of a sales tax increase, but he would not flatly rule out signing such legislation.

He said he prefers the more targeted tax increases he is proposing, such as a boost in the statewide tax on restaurant meals and hotel rooms to generate $150 million a year for cities and towns.

"I'm not ready to start talking about some new proposal until we talk about the ones we've put on the table," said Patrick.

Jon B. Hurst, president of the Retailers Association of Massachusetts, told reporters that an increase in the sales tax would prompt more people to shop over the border in New Hampshire. There is no sales tax there.

He said that an increase lacks common sense. People would also make more tax-free purchases over the Internet, he said.

"It's going to drive sales away from Massachusetts," Hurst said. "It's going to cost us jobs on Main Street."

Rep. Robert P. Spellane, co-chairman of the Committee on Public Service who attended the meeting, said he is leaning in favor of increasing the sales tax to 6 percent.

The Worcester Democrat said he expected a single vote on a tax package instead of multiple votes on a series of tax-hike proposals.

The Massachusetts Taxpayers Foundation, which has not taken a position on a sales tax increase, said that increasing the sales tax to 6 percent could annually cost residents about $120 per person or $325 per household.

Of the 45 states with a broad-based sales tax, Massachusetts ranks last in revenues collected per $1,000 of income, said the foundation. If the sales tax jumps to 6 percent, Massachusetts would rank No. 42.

Food and purchases of any single item of clothing less than $175 are exempt from the state sales tax.